Your (Kids’) Rock-n-Roll Lifestyle
What We Can All Learn From Families With Wealth
Who out there remembers that great 90s Cake song, Rock-n-Roll Lifestyle? For those who don’t know it, the lyrics start like this:
Well, your CD collection
Looks shiny and costly
How much did you pay for your bad Moto Guzzi?
And how much did you spend
On your black leather jacket?
Is it you or your parents in this income tax bracket?
CDs may be a thing of the past, but you get the idea. Some twentysomethings live large on the largess of their parents—and most of them shouldn’t.
In my twenty-five years of working with twentysomethings, I’ve had the pleasure of working with a number of high-net-worth families. I’ve also given many workshops for investment banks about twentysomethings and money.
Why do people with money need to worry about money?
Because most families lose their wealth by the third generation. The first generation, aka the builders, create wealth by starting a business or making smart investments. The second generation, aka the maintainers, sustain their standard of living but may lack the skills or the drive to add to it. The third generation, aka the spenders, grow up getting what they want and they’re disconnected from the work that made their lives possible. They overspend and wind up with lives they are not prepared to live.
Parents with wealth worry about how to keep money from ruining kids and how to keep kids from ruining money. As a result, many are more intentional than your average household about how they manage money and young adults—and we could all learn something from them.
Here are Five Principles Every Family Should Follow: